China to bolster support for small firms, self-employed individuals

China will extend more support to micro and small enterprises (MSEs) and self-employed individuals to help them overcome difficulties and grow their businesses, the State Council’s executive meeting chaired by Premier Li Keqiang decided on Wednesday.

The many MSEs and self-employed individuals across economic sectors are a key force underpinning China’s resilient economic and job growth. By the end of April, the country has over 44 million MSEs and more than 95 million self-employed individuals. They have become the country’s primary job providers.

Under the complex and challenging circumstances at home and abroad, MSEs and self-employed individuals still face difficulties in their production and operation, and stronger and targeted support is very much called for.

“Overall, the economy is going in a positive direction this year, yet uncertainties are on the rise. We need to make further efforts to maintain stability on the six priority fronts and provide protections in the six key areas. Support should be kept up as needed,” Li said.

Inclusive finance in the support of MSEs and self-employed individuals will be enhanced. Financial institutions will be encouraged to expand credit loans, first-time loans, medium- and long-term loans and loan renewals without principal repayment, and to promote the pay-as-you-go lending model. The shortening of the maturity of commercial acceptance bills from one year to six months will be contemplated in order to ease enterprises’ pressure of outstanding payments.

Multi-pronged measures will be taken to help MSEs and self-employed individuals cope with the price rally of raw materials in upstream industries. Large enterprises will be supported to set up platforms to match supply with demand across the industrial chains in key sectors. Market-oriented approaches will be applied to guide upstream and downstream links of supply chains to keep raw material supply stable and coordinate production and sales, thus ensuring supply and price stability. Irregularities such as hoarding and price gouging will be combated.

Sub-national governments will be supported in proving MSEs and self-employed individuals with job retention subsidies. Internet platforms will be encouraged to lower excessive charges and commissions, as well as the ratio of commissions and promotion fees for new businesses.

“Recent years have seen unprecedented expansion of MSEs and self-employed individuals. The policy measures aiming to provide protections in the six priority areas need to be further implemented for these market actors. As many people, including college graduates, change their mindsets and choose flexible employment nowadays, the government needs to set up platforms and provide them with support,” Li said.

Impartial oversight will be strengthened. The mechanism of fair competition review will be strictly implemented to see that all market entities are treated as equals. Discriminatory policies and regulations that hinder market entities’ participation in economic activities will be overhauled and repealed.

The meeting urged stronger law enforcement against monopoly and unfair competition. Malicious subsidies and below-cost dumping by advantageously-positioned companies to seize more market share will be investigated and tackled under the law. Arbitrary charges and unwarranted fines will be overhauled.

Backstop measures will be taken to meet basic living needs. Efforts will be made toward covering self-employed individuals and flexibly employed people with social insurance schemes, and household registration restrictions will be lifted to allow workers to enroll in these schemes where they work. Trials will be made to include flexibly employed people in the workplace safety insurance scheme.

“We must recognize that most MSEs and self-employed individuals are still at a disadvantage in market competition. Hence, the policy support must not stop, but should be kept up as needed. Policies for tax and fee cuts shall be earnestly implemented,” Li said, “We need to promote fair competition through impartial regulation. Unfair competition, once spotted, must be resolutely dealt with. This is to foster a more enabling environment for market entities to grow. Meanwhile, the government should also provide protection that helps to meet their essential needs.”

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